Effects of an Inaccurate Sorting Procedure on Optimal Procurement and Production Decisions in a Remanufacturing System

Abstract

Under the uncertainty of market demand and quality of returns, sorting prior to disassembly is effective for timely obtaining information about the remanufacturability of used products. In this article, we assume that the remanufacturable fraction of used products is a random variable and introduce an inaccurate sorting procedure of used products prior to disassembly. Then, three two-stage optimization models are formulated to maximize the expected profits of a remanufacturer in a single period with used products and/or new parts as inputs to meet the stochastic market demand. Moreover, the article provides a case study to explore the optimal decisions under different scenarios and analyzes the effects of parameters, such as the unit disassembly cost, unit sorting cost, and proportion of sorting errors. Finally, the results indicate that whether remanufacturing with sorting is more profitable than that without sorting mainly depends on the sorting accuracy and the relative value between disassembly cost and sorting cost. When considering or not considering a long lead time of new parts, the effects of sorting errors on procurement policies are different. A long lead time will result in lower expected profits. Finally, the diverse types of classification errors have different influences on procurement policies and corresponding expected profit.